Volkswagen's board upholds cost-cutting strategy – trade union expresses opposition
Volkswagen's top brains discussed stricter cost-cutting measures on Monday, potentially leading to plant shutdowns and layoffs. CFO Antlitz spoke at a staff meeting, declaring that pre-pandemic sales levels wouldn't be reached again in Europe. Volkswagen is estimated to be missing around 500,000 car sales and production for two plants.
Antlitz further explained, "It's not about product quality or sales performance issues. We can only offer affordable and competitive pricing if we have a cost-effective base. We need to work together to achieve this again."
In their German locations, productivity needs to be enhanced, and expenses reduced, Antlitz warned. "We've got about a year, maybe two years, to turn things around."
CEO Oliver Blume stated, "We'll implement necessary measures to make Volkswagen more cost-efficient. It's our collective responsibility to bring the brand back to its rightful place."
Cavallo, the works council chair, voiced strong opposition: "Never in a million years" would she back the proposed austerity measures. Cavallo criticized management for lacking innovative ideas, labeling their crisis response as "not just a failure, but a sign of bankruptcy."
Cavallo agreed, "We're dealing with serious issues here," but attributed Volkswagen's problems to management inefficiencies, not German locations or personnel costs. She urged, "Let's return to technological leadership. Everything irrelevant to that must be reconsidered."
She called for a decrease in complexity and addressed excessive regulations, urging to stop unnecessary documentation and redundant security processes. "That's management's task."
Addressing Volkswagen's widespread impact, Cavallo said, "If it's a crisis at the automaker, it's not just about Volkswagen AG's 120,000 employees." It's about Lower Saxony. It's about Germany."
Labor Minister Heil urged negotiations, stating, "This is the hour of co-determination. It must be achieved with all involved to safeguard all VW locations and avoid job cuts whenever possible."
The government has pledged support, with Heil mentioning the cabinet's recent decision to promote electric car sales with an additional 500 million euros yearly tax incentive. Companies can now depreciate electric company cars faster and enjoy lower tax rates on more expensive models. "Germany must remain the land of cars," said Heil.
Government spokesperson Wolfgang Büchner clarified, "Chancellor Olaf Scholz (SPD) has thoroughly informed himself about the VW situation. But it's first and foremost the company's responsibility to solve its problems." He confirmed, "The federal government won't interfere at this stage."
Antlitz proposed, "As part of our savings plan, we should focus on reducing expenses in our German locations to improve affordability and competitiveness."
Cavallo suggested, "In our savings plan, let's simplify processes, cut back on unnecessary regulations, and decrease complexity to boost productivity and lower costs."
